Field of the Invention
Embodiments of the present invention generally relate to a system for performing an online payment transaction.
Description of the Related Art
As is known, several methods of payment for goods or services exist today, including cash, check, credit card, and debit card. Some of the most popular methods of payment include payment by credit card and by debit card. When credit/debit cards were first introduced, there was no concept of online payments, online banking, or payments via mobile phone. Today, these forms of payment are also very common.
As is known, a credit card system is one where an issuer, usually a financial institution, issues a credit card to a customer. The customer may then pay for goods or services using the credit card. Essentially, the issuer is lending money to the customer to pay for the good or services.
Another common form of payment is using a debit card. Using a debit card is functionally similar to writing a check, as the funds are withdrawn from the bank account of the customer. A transaction using a debit card may be a “signature debit” transaction or a “PIN debit” transaction. When using either form of debit transaction at a physical merchant location, the customer may swipe or insert the debit card into a terminal, or the customer may hand the debit card to the cashier who will do so. A signature debit transaction is authenticated much like a credit card transaction with the customer signing a receipt to verify their identity. A PIN debit transaction, on the other hand, is authenticated when the customer enters a correct personal identification number (PIN) into the terminal.
A signature debit transaction may also be initiated on the Internet. For example, the buyer may type a debit card number into the appropriate payment field on an Internet payment webpage to pay for the goods or services provided by the online merchant. To the online merchant, a signature debit transaction is processed similarly to a credit card transaction.
However, PIN debit transactions are not an available form of payment in online transactions. Customers are wary of entering their PIN number into a payment page of an online merchant for security reasons. The PIN number can be easily stolen by a computer hacker, which may result in the unlawful use of the customer's bank account or even more serious credit problems.
As the foregoing illustrates, there is a need in the art for a way to use a debit card for an online transaction that is more secure than the current approach.